Agency Management

MYTH: For my new nonprofit, I will put all family members on the board of directors, and we will control the organization.

MYTH: Nonprofits are not allowed to make a profit from their activities.

MYTH: I am going to convert my for-profit business to a nonprofit business.

MYTH: If we’re running our nonprofit efficiently, our overhead and administrative costs should be small.

MYTH: I am starting a foundation to give out school supplies to kids who cannot afford them. I can’t wait to see their little faces when I give them new backpacks and markers!

MYTH: I am going to be president of my nonprofit and make $100,000 a year!

MYTH: Nonprofit and tax-exempt mean the same thing. MYTH: I own my nonprofit.

Don’t forget to calculate the value of volunteers who make the program work—drivers to take people to and from their destinations, corporate employees who show up to work with students. It’s important to present a budget that accurately demonstrates what a program actually costs, even if some of those costs are covered by volunteer work or in-kind contributions.

One of the elements of a persuasive proposal is the credibility of the applicant. Nonprofits should think about what it is that establishes their stature and value to the community. Hint: it’s probably more than just your own claims about your successes or your longevity or your staff resumes.

Thousands of foundations, billions of dollars and only 1.5 million nonprofits. Let’s get our tax-exemption and snag that first, free money! Spoiler alert: this story does not end well. Most proposals get rejected, most brand-new nonprofits do not get their first dollar from a foundation and some have estimated that half the new nonprofits will fizzle out in a year or two. What about the “other half?” What are the characteristics of nonprofits that stand the best chance of winning foundation support?